27 August 2015

The importance of mortgage
advice has never been greater and it is an interesting fact that, according to
the Council of Mortgage Lenders, 69% of all mortgages were written through
professional advisers during the second quarter of the year. This is a substantial
uplift on previous quarters and there are probably a number of reasons for this
including long delays we are advised are happening with some lenders
both in interview availability and processing times.

The professional
mortgage adviser reviews the whole market for you and can identify the
best lending options and then deal directly with the lenders central processing
units, speeding up the process from application to offer. That said, even in
this area we know of at least one lender that is eleven days behind on
post or electronic updates. A good adviser will listen to your specific needs
and timescales and ensure that they line you up with a lender who will match
both. So, if speed is crucial then you may need to consider working with a
lender where the rate may not be the keenest on the market but where you get
what you want. Your adviser will discuss this in detail with you before you
make any decision.

On a different subject, a
number of mortgage lenders are looking ruefully at their performance against
target for the current calendar year and casting sideways glances at their
competitors. At the start of the year, no one was really sure what the
effect of the 2014 Mortgage Market Review would have. A number of lenders are,
allegedly, well below target and we will probably see a price war in the next
few months as they look to gain ground before the year end

20 August 2015

Panic Panic Panic.........ok, so that's a little
dramatic! However, we have seen a number
of lenders increase rates over the last few days. TSB, Halifax,
Nationwide, Virgin Money, NatWest and Coventry Building Society are just a few
who increased their rates on various product offerings. We have seen SWAP rates (the mechanism
through which lenders can acquire a fixed price for funding over a specific
period of time) start to creep upwards and as such lenders are re-pricing
accordingly. Despite my headline, I
don't believe it is really time to panic just yet. Many pundits are suggesting middle of 2016
before we see a true rate rise. Just
keep an eye on things if you are looking for a long term bargain.

What we have seen recently are lot of enquiries to
remortgage for home improvements.
Increasing the value in your property can involve large renovation,
adding a room or two and a general investment in time and builders. That said, with house prices booming in the
local areas, many have decided to look at cosmetic changes. So up-grading kitchens, bathrooms,
redecorations and so on. Whether small
or large, the investment in property can bring rewards to the value and if you
are staying put, reward in the satisfaction of home comfort. Plus a potential large saving in stamp duty
too versus moving home!

We have also seen an increase in customers looking to
consolidate debt or even look at debt management plans. Both can sometimes cause issues. If you
consolidate unsecured credit in to your mortgage, although your monthly
payments may be lower, you may be paying more interest for your debt over a
longer term. With debt management plans,
or Individual Voluntary Arrangements (IVA), etc, again, the lower monthly payments
may help in the short term, but you may well find it hard to gain an approval
from a lender to refinance at a later date.
Lenders tend to shy away from debt management plans and may not consider
anyone who has been in an IVA unless it has been discharged for more than three
to four years. Advice should always be sought before entering in to these types
of arrangements or agreements.

13 August 2015

Over the last few weeks, we have seen a number of lenders
who have post positive half year results.
Many stating that they have increased lending against their previous
financial year. But this is hardly
surprising as many didn't want to lend (or maybe were not allowed to!) post the
new regulation implementations in early 2014.
However, it is important to run with the positive news and such
announcements on half yearly figures show that lenders are now keen to lend and
are looking at ways to compete in an active market. What this means is that end consumers should
be able to bag a bargain for some time yet whilst rates remain low and
competitive. Some industry pundits are
even stating that it will be the middle of 2016 before they expect any rate
rises...

This has also resulted in a swing between the high street
and niche lenders. The smaller lenders
are stealing market share from the 'super tankers' on the high street as an
increasing number of consumers are requiring a manual and human assessment rather
than a computer decision making system.
Despite all of the available technologies in the current climate,
sometimes a conversation with a human being is just what is needed!

From where we see it, on the front line, I would dare to
suggest that consumer confidence appears to be the highest it has been for some
considerable time. People are selling, people are buying and many
are remortgaging! August is never normally this busy! It is not just one geographical area either,
although does appears to have a leaning to the south. What does seem to be
apparent is that the demand is for ‘all types of mortgages' for all types of
people! From the straight forward, to the complex, to the
commercial shop front, to the credit issues, to the first time landlord
investing in their first Buy to Let property and so much more, we are seeing
many different scenarios.

Finally, Nationwide House Price index has indicated that
House Prices increased in July by 0.4% compared to June and 3.5% over the last
twelve months. The average house price
now sits at £195,621.

06 August 2015

With the rental market continuing to be buoyant, and with no
signs of declining, the mortgage market is active as lenders recognise the huge
demand for Buy to Let (investment property) mortgages. These can be from a first time landlord,
right through to the experienced House of Multiple Occupation (HMO) / Student
Let portfolio investor. Deposit
requirements can be as low as just 15% and as this sector has also recently
been through a price war, rates are competitive (some now sub 2%) and may also
come with packaged deals, such as free valuation and free legal costs.

But with so many lenders now in this sector, rates may not
remain the main area of competition for much longer! Some lenders are also
reviewing criteria in order to attract new business. Many lenders historically would not allow
first time landlords, anyone earning an income less than £25k per annum, those
who have more than ten properties, or those who may have had previous blips on
credit history, to give you a few examples.

However, we have seen recently that criteria and attitudes
are being relaxed and lenders are having to compete to attract more
business. There are also a large number
of new entrants to this market including Foundation Home Loans, AXIS Bank,
Fleet Mortgages and Pepper Home Loans to name just a few. Each have launched their own niche
propositions and are looking to attract a certain type of Buy to Let customer.

Buy to Let properties will often provide a modest monthly
return over and above the mortgage payment.
The additional amount can be used to supplement income, or, with
flexible mortgages, can be used to "overpay" the mortgage and reduce
the term.

Most lenders in this sector will require the rental income
to exceed the mortgage payment by up to 125%, normally at a marginal rate of
circa 5% and, after costs such as managing agents, this should leave some spare
cash to cover repairs, maintenance and landlords insurance. It should also
enable a fund to be established to cover the mortgage payment in the event that
there is no tenant in situ for a while. Remember that, whatever the deal,
lender terms and conditions will always apply.